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Title: Baby Food in Canada
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BABY FOOD IN CANADA
Euromonitor International
August 2015

BABY FOOD IN CANADA

Passport

LIST OF CONTENTS AND TABLES
Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 2
Prospects ..................................................................................................................................... 3
Category Data .............................................................................................................................. 4
Table 1
Table 2
Table 3
Table 4
Table 5
Table 6
Table 7
Table 8
Table 9
Table 10
Table 11

Sales of Baby Food by Category: Volume 2010-2015.................................. 4
Sales of Baby Food by Category: Value 2010-2015 .................................... 4
Sales of Baby Food by Category: % Volume Growth 2010-2015 ................. 4
Sales of Baby Food by Category: % Value Growth 2010-2015 .................... 5
NBO Company Shares of Baby Food: % Value 2011-2015 ......................... 5
LBN Brand Shares of Baby Food: % Value 2012-2015 ................................ 6
Distribution of Baby Food by Format: % Value 2010-2015........................... 6
Forecast Sales of Baby Food by Category: Volume 2015-2020................... 7
Forecast Sales of Baby Food by Category: Value 2015-2020...................... 7
Forecast Sales of Baby Food by Category: % Volume Growth 20152020 ............................................................................................................. 8
Forecast Sales of Baby Food by Category: % Value Growth 20152020 ............................................................................................................. 8

© Euromonitor International

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BABY FOOD IN CANADA

BABY FOOD IN CANADA
HEADLINES
 Baby food increases by 2% in retail current value terms in 2015, to reach CAD606 million
 The low birth rate limits growth, whilst the expansion of organic baby food offerings supports
growth
 Organic other baby food posts the highest growth, followed by organic prepared and dried
baby food
 The unit prices of baby food excluding milk formula continue to rise, bolstered by growing
organic offerings
 Nestlé Canada remains the leader in baby food with a 22% share in 2015, although this share
sees a decline
 Baby food is forecast to see a retail value CAGR of 1% at constant 2015 prices over the
forecast period, to reach CAD642 million in 2020

TRENDS
 The low birth rate in Canada as a whole offers little support to the growth of baby food,
including dried, prepared and other baby food and milk formula. The population between the
age of 0 and 36 months (babies and toddlers, the targets for baby food) grew by a mere 1% in
2014, and is expected to see less than 1% growth in 2015. Meanwhile, in response to
Canadian parents’ demand for natural and healthy food for their babies, a significant shift
towards organic baby food offerings took place over the last 3-4 years. As a result, overall
baby food experienced an increase of 2% in current value terms, to reach CAD606 million in
2015
 The largest category in baby food, milk formula (in liquid and powder form), only increased by
1% in current value terms to reach CAD396 million in 2015, accounting for nearly two thirds of
overall baby food in value terms. This category has been only slowly increasing, largely in line
with the growth in the population younger than 36 months. First, the prevalence of
breastfeeding steadily increased over the years, as it becomes more and more socially
acceptable and even encouraged. Second, milk formula is under very tight regulation, and it is
difficult to innovate in terms of formulation, and there is not much room to play with the
packaging. Currently, there is still no domestic production for milk formula, although an infant
formula manufacturing facility is currently being built in Scarborough, ON, by Upstart
Canadian Dairy Manufacturing; construction started in 2013, according to a Globe and Mail
report in December 2013.
 Baby food excluding milk formula was very active over the last few years, and in 2015 it
edged up marginally, with 1% retail volume growth and 2% current value growth. The unit
price of baby food excluding milk formula continued to rise, as consumers are increasingly
converting to organic offerings, typically in pouch format, thus helping value growth to outpace
volume growth, which is largely dependent on the growth of the target population for baby
food.
 The drivers behind the growth in baby food excluding milk formula are multiple. First, there is
growing consciousness of health and wellness in food and beverages amongst Canadian
consumers, which is naturally trickling down to baby food, in which consumers are less pricesensitive. Organic offerings in baby food align well with the desire of Canadian parents to feed
their loved ones with high-quality, natural and nutritious food. Second, packaging innovations,

© Euromonitor International

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1

BABY FOOD IN CANADA

particularly pouches with resealable caps, have also met head-on the needs of time-strapped
consumers and parents who are constantly on-the-go. Third, retailers such as Wal-Mart and
Loblaws have been instrumental in helping develop the market. In particular, Wal-Mart’s
decision to put on its shelves products from Baby Gourmet around 2011, when it was only a
start-up company, and later Love Child, in a similar situation, resulted in a radically different
pathway for these brands to succeed. Naturally, the emergence of these smaller brands,
represented by Baby Gourmet and Love Child, and their entrepreneurial spirit was a potent
driver for the growth of organic baby food.
 One of the key aspects of a successful baby food business is to establish credibility and trust
in the brand amongst consumers, which typically takes years or even decades to build. Smallbatch production, local roots and small business nature, enhanced transparency in terms of
ingredients and production processes, as well as customer intimacy via tools such as social
media, has been leveraged by brands in this space.
 Amongst dried, prepared and other baby food, such as baby rusks, baby fruit juices and baby
pasta, most growth was seen in prepared and other baby food, both growing by 3% in current
value terms in 2015, whilst dried baby food, chiefly cereal, recorded a 1% decline in retail
volume terms and stagnation in current value terms in 2015. The growth in prepared and
other baby food was mainly due to the fact that these are the categories in which smaller
brands pioneered organic offerings and increased in significance over the last three to four
years, with examples such as Baby Gourmet. Traditional jarred baby food products under
major brands such as Heinz are being challenged, and saw sales decline over the last three
to four years. Organic versions of dried baby food only recently (around 2014) started to see
growing offerings, with the latest entrant being Amara Organic Baby Food in early 2015 from
the US, and Baby Gourmet’s oatmeal and grain cereals, launched in late 2014.
 Trade sources have suggested that the organic movement in the US appears to be faster and
stronger than in Canada or Mexico, and what happened in earlier years in the US may also
take place in Canada, as its development path looks very similar. Demand for gluten-free
baby food also steadily increased over the review period, according to trade sources.
 One of the few innovations in milk formula, Agropur’s launch of the Natrel Baboo brand of
shelf-stable milk fortified with omega-3/DHA and vitamins in 2013, turned out to be
unsuccessful, and the company discontinued the brand in July 2014. The packaging format
(cartons) lacked resealability, and it competed with products such as organic versions of
prepared and other baby food, and consumers’ perception of shelf-stable products as nonfresh contributed to its disappointing performance.

COMPETITIVE LANDSCAPE
 Nestlé Canada remained the leader in baby food in 2015 with a 22% share, but saw its share
decline, mainly due to its decision to exit prepared baby food (particularly purée) altogether in
2013-2014. It was followed closely by Mead Johnson Nutrition, Heinz Co of Canada and
Abbott Laboratories. Except for Heinz, the other three players have significant shares in the
largest category, milk formula.
 Milk formula in Canada continues to be dominated by three major players, namely Mead
Johnson Nutrition, Abbott Laboratories and Nestlé Canada, with value shares of 33%, 29%
and 28% respectively in 2015. These companies accounted for a combined 89% share of
value sales in milk formula in 2015, which was similar to 2014, and maintained relatively
stable shares in recent years. Loblaw Cos, Wal-Mart Canada and other private label players
and smaller operators accounted for the remaining 11% share of sales. Mead Johnson

© Euromonitor International

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2

BABY FOOD IN CANADA

Nutrition’s Enfamil A+ Grab and Go single serve packet won the 2014 Best New Product
Award for baby formula, according to surveys conducted by BrandSpark.
 Some operators believe that smaller companies helped to establish the organic trend, whilst
major players such as Heinz benefited from the trend the most, due to its scale of business
and extensive distribution. However, others believe that Heinz struggled to establish credibility
in organic offerings, as consumers typically do not associate high-quality, small batch
production and healthy, organic offerings with traditional brands such as Heinz and Gerber.
 Besides the Heinz, Baby Gourmet and PC brands, there are also a slew of other brands in
organic baby food, including a number of US brands, including the Ella’s Garden brand from
US-based Ella’s Kitchen, the Happytot brand from New York-based Nurture Inc and the USbased Plum brand, and Canadian companies, including Love Child. Most of these brands are
at similar price point, and offer similar products in terms of convenience (pouches for on-thego consumption and resealability) and nutritional value. As the competition within the category
intensifies, it is increasingly difficult to stand out. Some brands hope to establish differentiation
based on nutritional value by incorporating super foods, such as quinoa and vitamin C-rich
acerola fruit by Love Child. Others seek growth opportunities outside of baby food, by, for
instance, expanding into adjacent categories. A good example is the expansion of Plum
Organics into adult snacking in late 2014. Some operators, however, are cautious about this,
and believe that their value is best positioned in the baby food category.
 In terms of the distribution of baby food, significant channels include hypermarkets,
represented by Wal-Mart Canada and Real Canadian Superstore, supermarkets, represented
by regular Wal-Mart stores, Metro and Overwaite, as well as health specialist stores such as
London Drugs in the west and Shoppers Drug Mart. In terms of organic offerings, feedback
indicates that two channels are growing in importance, one is healthfood stores, including
Whole Foods and healthfood sections in major grocery retailers such as Loblaws, and the
other is online retailers, chiefly Amazon.ca. Toys and games retailers such as Toys’R’Us have
not been doing well in terms of sales of baby food in recent years, according to trade sources.

PROSPECTS
 Overall baby food is forecast to register a retail value CAGR of 1% at constant 2015 prices
over the forecast period, to reach CAD642 million in 2020, mainly owing to the slow growth of
the target population for baby food over the forecast period. For example, the population
under 36 months old is expected to grow by a CAGR of only 1% in the next five years.
 Milk formula is projected to increase by a value CAGR of 1% at constant 2015 prices, to reach
CAD414 million in 2020, mostly in line with population growth. Meanwhile, baby food
excluding milk formula has a more positive growth outlook, with a value CAGR of 2% in the
next five years, to reach CAD228 million in 2020.
 Other baby food is expected to lead growth in baby food excluding milk formula, due to the
growing snacking trend, including in baby food, and the proliferation of new brands and types
of food, with a CAGR of 3% in value terms at constant 2015 prices, to reach CAD71 million in
2020. Prepared baby food is expected to follow with a CAGR of 2% in value terms at constant
2015 prices, to reach CAD107 million in 2020.
 In particular, organic baby food excluding milk formula is expected to expand. Operators
expect the strong momentum to continue for the next few years, partly due to the much lower
proportion of organic offerings in baby food (excluding milk formula) in Canada compared with
that in the Europe and Australia. In addition, trade sources have noted that the organic
movement in Canada used to be mainly in the major metropolitan areas, and has gradually
spread to areas outside the cities, and more and more people are embracing it as a lifestyle.

© Euromonitor International

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3

BABY FOOD IN CANADA

Passport

 One area of potential growth in baby food is to use exotic ingredients, such as those used by
the Amara brand, launched in British Columbia, Alberta and Saskatchewan in early 2015,
which also uses freeze-dry technology to retain the nutrients, and claims to be free of GMO
(genetically modified organisms) and gluten, and is organic. Canadian consumers, particularly
mothers, are more and more accepting of novel ingredients in baby food; a representation of
a growing trend of diversification of flavours and tastes in foods in general.
 In March 2015, Kraft Foods announced a merger with HJ Heinz Co, orchestrated by 3G
Capital and Berkshire Hathaway. Trade sources believe that the new company, likely to be
called The Kraft Heinz Co, will focus more on major and mega brands in its portfolio, such as
the Heinz baby food brand, taking resources and support away from smaller brands in the
months to come, based on the track record from previous transactions from 3G Capital and
Berkshire Hathaway.

CATEGORY DATA
Table 1

Sales of Baby Food by Category: Volume 2010-2015

tonnes

Dried Baby Food
Prepared Baby Food
Milk Formula
- Standard Milk Formula
- Follow-on Milk Formula
- Toddler Milk Formula
- Special Baby Milk
Formula
Other Baby Food
Baby Food
Source:

2010

2011

2012

2013

2014

2015

3,551.5
10,492.3
25,972.0
15,543.9
4,459.4
2,648.4
3,320.3

3,587.0
10,146.8
25,937.2
15,490.9
4,438.7
2,669.3
3,338.3

3,585.3
9,674.8
25,820.1
15,382.3
4,401.2
2,677.2
3,359.4

3,575.0
9,815.1
25,550.6
15,153.6
4,342.7
2,673.2
3,381.1

3,546.4
9,983.5
25,283.7
14,970.3
4,285.7
2,646.2
3,381.5

3,530.0
10,099.4
25,064.8
14,808.6
4,228.7
2,629.2
3,398.2

3,341.7
43,357.6

3,292.6
42,963.6

3,269.3
42,349.5

3,280.5
42,221.2

3,353.7
42,167.4

3,431.1
42,125.3

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2

Sales of Baby Food by Category: Value 2010-2015

CAD million

Dried Baby Food
Prepared Baby Food
Milk Formula
- Standard Milk Formula
- Follow-on Milk Formula
- Toddler Milk Formula
- Special Baby Milk
Formula
Other Baby Food
Baby Food
Source:

Table 3

2010

2011

2012

2013

2014

2015

48.2
93.0
366.6
207.7
70.8
26.6
61.6

49.2
92.3
373.7
211.2
72.0
27.4
63.1

50.2
90.0
379.5
213.8
73.0
28.1
64.6

50.5
92.5
384.7
216.4
73.6
28.4
66.2

50.1
95.8
390.4
219.4
74.4
28.8
67.8

50.2
98.2
395.9
221.9
75.1
29.2
69.8

55.1
562.8

55.9
571.1

56.9
576.6

57.6
585.3

59.6
595.9

61.6
605.9

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Sales of Baby Food by Category: % Volume Growth 2010-2015

© Euromonitor International

4

BABY FOOD IN CANADA

Passport

% volume growth

Dried Baby Food
Prepared Baby Food
Milk Formula
- Standard Milk Formula
- Follow-on Milk Formula
- Toddler Milk Formula
- Special Baby Milk Formula
Other Baby Food
Baby Food
Source:

2014/15

2010-15 CAGR

2010/15 Total

-0.5
1.2
-0.9
-1.1
-1.3
-0.6
0.5
2.3
-0.1

-0.1
-0.8
-0.7
-1.0
-1.1
-0.1
0.5
0.5
-0.6

-0.6
-3.7
-3.5
-4.7
-5.2
-0.7
2.3
2.7
-2.8

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4

Sales of Baby Food by Category: % Value Growth 2010-2015

% current value growth

Dried Baby Food
Prepared Baby Food
Milk Formula
- Standard Milk Formula
- Follow-on Milk Formula
- Toddler Milk Formula
- Special Baby Milk Formula
Other Baby Food
Baby Food
Source:

2014/15

2010-15 CAGR

2010/15 Total

0.2
2.5
1.4
1.2
1.0
1.4
2.8
3.3
1.7

0.8
1.1
1.6
1.3
1.2
1.9
2.5
2.3
1.5

4.1
5.7
8.0
6.9
6.1
9.7
13.3
11.8
7.7

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5

NBO Company Shares of Baby Food: % Value 2011-2015

% retail value rsp
Company
Nestlé Canada Inc
Mead Johnson Nutrition Co
Heinz Co of Canada Ltd,
HJ
Abbott Laboratories Inc
Loblaw Cos Ltd
Mondelez Canada Inc
Milupa Aptamil
Baby Gourmet Foods Inc
Hain Celestial Canada
Bobobaby Inc
Kraft Canada Inc
Beech-Nut Nutrition Corp
Clearly Canadian
Beverage Corp
Novartis Nutrition Canada
My Organic Baby Inc
Others
Total

© Euromonitor International

2011

2012

2013

2014

2015

24.5
20.6
16.8

24.5
20.9
16.7

23.3
21.0
17.9

22.3
21.1
18.6

21.7
21.2
18.8

18.9
3.1
1.3
0.1
0.6
0.1
1.7
0.5
-

19.2
3.0
1.7
1.3
0.2
0.6
0.1
-

19.0
3.0
1.7
1.2
0.4
0.6
-

18.8
3.0
1.7
1.2
0.8
0.6
-

18.7
3.0
1.7
1.2
0.9
0.6
-

11.9
100.0

11.8
100.0

11.9
100.0

11.9
100.0

12.3
100.0

5

BABY FOOD IN CANADA

Source:

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 6

LBN Brand Shares of Baby Food: % Value 2012-2015

% retail value rsp
Brand
Heinz
Enfamil
Good Start
Similac
Nestlé Baby
Other Private Label
President's Choice
PediaSure
Enfapro
Isomil
Christie
Enfagrow
Nestlé Follow-Up
Milupa
Baby Gourmet
Farley's
Earth's Best
Alimentum
Alsoy
Gerber
Pablum
Bobobaby
Beech-Nut
My Organic Baby
Christie
Enfalac
My Organic Baby
Gerber
Others
Total
Source:

Passport

Company

2012

2013

2014

2015

Heinz Co of Canada Ltd, HJ
Mead Johnson Nutrition Co
Nestlé Canada Inc
Abbott Laboratories Inc
Nestlé Canada Inc

15.5
17.5
16.6
14.3
3.7
3.4
3.0
2.5
1.9
1.9
1.7
1.4
1.4
1.3
0.2
0.9
0.6
0.5
0.4
2.5
0.3
0.1
-

16.9
17.6
16.5
14.2
3.7
3.3
3.0
2.4
1.9
1.9
1.7
1.4
1.4
1.2
0.4
0.9
0.6
0.5
0.4
1.3
0.1
-

17.7
17.7
16.4
14.1
3.5
3.2
3.0
2.4
2.0
1.9
1.7
1.4
1.4
1.2
0.8
0.9
0.6
0.5
0.4
0.6
0.0
-

17.9
17.8
16.2
13.9
3.5
3.2
3.0
2.4
2.0
1.9
1.7
1.5
1.4
1.2
0.9
0.9
0.6
0.5
0.4
0.3
-

8.4
100.0

8.6
100.0

8.6
100.0

9.1
100.0

Loblaw Cos Ltd
Abbott Laboratories Inc
Mead Johnson Nutrition Co
Abbott Laboratories Inc
Mondelez Canada Inc
Mead Johnson Nutrition Co
Nestlé Canada Inc
Milupa Aptamil
Baby Gourmet Foods Inc
Heinz Co of Canada Ltd, HJ
Hain Celestial Canada
Abbott Laboratories Inc
Nestlé Canada Inc
Nestlé Canada Inc
Heinz Co of Canada Ltd, HJ
Bobobaby Inc
Beech-Nut Nutrition Corp
Clearly Canadian
Beverage Corp
Kraft Canada Inc
Mead Johnson Nutrition Co
My Organic Baby Inc
Novartis Nutrition Canada

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7

Distribution of Baby Food by Format: % Value 2010-2015

% retail value rsp

Store-Based Retailing
- Grocery Retailers
-- Modern Grocery
Retailers
--- Convenience Stores
--- Discounters
--- Forecourt Retailers
--- Hypermarkets
--- Supermarkets
-- Traditional Grocery

© Euromonitor International

2010

2011

2012

2013

2014

2015

99.7
74.9
65.6

99.8
75.8
66.8

99.8
77.8
68.5

99.8
77.9
68.8

99.7
77.7
68.7

99.6
77.5
68.6

0.1
5.1
0.2
12.2
48.0
9.2

0.1
5.2
0.2
13.3
48.0
9.0

0.1
5.3
0.2
14.1
48.9
9.3

0.1
5.3
0.1
14.5
48.8
9.1

0.1
5.3
0.1
14.9
48.3
9.0

0.1
5.3
0.1
15.1
47.9
9.0

6

BABY FOOD IN CANADA

Retailers
--- Food/drink/tobacco
specialists
--- Independent Small
Grocers
--- Other Grocery
Retailers
- Non-Grocery Specialists
-- Health and Beauty
Specialist Retailers
-- Mixed Retailers
-- Other Foods NonGrocery Specialists
Non-Store Retailing
- Vending
- Homeshopping
- Internet Retailing
- Direct Selling
Total
Source:

Passport

-

-

-

-

-

-

9.2

9.0

9.3

9.1

9.0

9.0

-

-

-

-

-

-

16.8
16.8

16.7
16.7

17.2
17.2

17.0
17.0

17.1
17.1

17.1
17.1

8.0
-

7.3
-

4.8
-

4.8
-

4.9
-

4.9
-

0.3
0.3
100.0

0.2
0.2
100.0

0.2
0.2
100.0

0.2
0.2
100.0

0.3
0.3
100.0

0.4
0.4
100.0

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 8

Forecast Sales of Baby Food by Category: Volume 2015-2020

tonnes

Dried Baby Food
Prepared Baby Food
Milk Formula
- Standard Milk Formula
- Follow-on Milk Formula
- Toddler Milk Formula
- Special Baby Milk
Formula
Other Baby Food
Baby Food
Source:

2015

2016

2017

2018

2019

2020

3,530.0
10,099.4
25,064.8
14,808.6
4,228.7
2,629.2
3,398.2

3,483.1
10,199.1
24,857.5
14,664.7
4,172.0
2,605.9
3,414.9

3,445.8
10,271.9
24,685.2
14,536.5
4,127.7
2,587.9
3,433.1

3,406.1
10,335.3
24,540.2
14,431.3
4,089.5
2,572.6
3,446.8

3,364.0
10,381.0
24,410.3
14,334.0
4,057.2
2,560.0
3,459.1

3,319.6
10,416.8
24,300.8
14,251.7
4,029.3
2,550.0
3,469.8

3,431.1
42,125.3

3,508.2
42,048.0

3,578.8
41,981.7

3,646.3
41,927.9

3,709.2
41,864.5

3,769.8
41,806.9

Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 9

Forecast Sales of Baby Food by Category: Value 2015-2020

CAD million

Dried Baby Food
Prepared Baby Food
Milk Formula
- Standard Milk Formula
- Follow-on Milk Formula
- Toddler Milk Formula
- Special Baby Milk
Formula
Other Baby Food
Baby Food
Source:

2015

2016

2017

2018

2019

2020

50.2
98.2
395.9
221.9
75.1
29.2
69.8

50.2
100.4
400.6
223.9
75.6
29.5
71.5

50.2
102.4
404.9
225.8
76.0
29.8
73.4

50.2
104.2
408.4
227.0
76.3
30.0
75.0

50.0
105.8
411.3
227.9
76.6
30.3
76.5

49.9
107.3
413.8
228.7
76.8
30.5
77.9

61.6
605.9

63.5
614.8

65.4
622.9

67.4
630.1

69.2
636.4

70.9
642.0

Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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